In May, Armenia recorded a budget deficit of 46.4 billion drams (over $118 million) after a surplus of 47.2 billion drams (over $120 million) in April, according to the World Bank's monthly report on Armenia's economic development.
Tax revenues in May remained almost unchanged, increasing by only 0.8%. VAT and excise tax collections decreased by 12.1% and 11.6% respectively, due to moderate consumption growth.
However, turnover tax and income tax collections increased by 25% and 14% respectively, helping to offset the decline in indirect taxes. Overall expenditures decreased by 9.7% due to an 18.4% reduction in current expenses.
On the other hand, capital expenditures more than doubled due to increased allocations for the road construction sectors. From January to May, the overall budget balance showed a marginal deficit of 64 million drams (over $150 thousand), in contrast to a surplus of 101 billion drams (over $250 million) recorded for the same period in 2023.
Earlier, Armenian Finance Minister Vahe Hovhannisyan stated that despite high economic growth, the country faces the risk of not meeting tax revenue targets in 2024. He predicted a shortfall of over 100 billion drams (more than $250 million).
BMG reminds that Armenia's state budget revenues for 2024 are planned at 2.7 trillion drams (over $6.9 billion), which will account for 24.9% of GDP. Meanwhile, expenditures will amount to 3.2 trillion drams (over $8.2 billion). The budget deficit will increase by approximately 142 billion drams (over $364 million) compared to the initial draft and will total around 483 billion drams (over $1.2 billion), or 4.6% of GDP.
